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TrendForce’s latest analysis of the server market finds that the global demand was noticeably lower than usual during 1H19 on account of the escalation of the US-China trade dispute. As the market enters the second half of the year, the replacement demand associated with the migration to the latest server processor platforms has yet to pick up significantly. Moreover, the demand from customers in China’s data center market is still rather uncertain. On the other hand, shipments from ODM direct businesses in the US to North America’s data center market is expected to maintain robust growth during the year’s second half. The growth from this end will compensate for the other factors that negatively affect the overall demand. Consequently, this year’s global server shipments will be roughly on par with the level of the previous year.
Tsinghua Unigroup announced on August 27 that it has signed an agreement with the Chongqing government to establish an R&D center and a wafer fab for DRAM production. The construction of these facilities, which will be located in Chongqing’s Liangjiang New Area, is scheduled to start near the end of 2019 and finish in 2021. TrendForce believes this latest event is another indication of China’s unwavering determination to achieve self-sufficiency in the supply of memory products. The continuing escalation of the US-China trade dispute and the blacklisting of JHICC by the US government have compelled the Chinese government to redouble their efforts to build up a domestic DRAM industry.
The global demand for semiconductor components in the second half of the year will be noticeably stronger compared with the first half due to the effect of the traditional peak season. TrendForce currently estimates that the global foundry revenue in 3Q19 will increase by 13% QoQ. TSMC, Samsung, and GlobalFoundries will again take first, second, and third place respectively in the revenue ranking. TSMC’s revenue market share is estimated at 50.5% in 3Q19, whereas the market shares of Samsung and Global foundries are estimated at 18.5% and 8% respectively for the same period. Although the end demand will be driven by the positive seasonality in 2H19, its growth will be lower compared with 2H18 due to the uncertainties around the US-China trade disputes. TrendForce thus expects the rebound in the semiconductor market during the year’s second half to be significantly weaker compared with the same period of the previous years.
Taiwan’s Lite-On Technology Corp. (Lite-On) announced on August 30 that it will offload the entire stake of its SSD business to Toshiba Memory Holdings Corp. (TMCHD). The purchase price is provisionally set at US$165 million, and the transaction is scheduled to be completed by 1H20. TrendForce’s preliminary assessment of this deal finds that Lite-On’s SSD business has significant advantages in operational efficiency and flexibility. Thus, the acquisition could be a major boon to TMCHD in terms of enhancing the range and quality of product offerings.
According to the newest statistics by TrendForce, the global top ten IC design companies for 2Q19 ranked by revenue have just been released, in which we see revenues of the top five all falling YoY. This was due to the US-China trade war, mounting inventory levels along the supply chain and less-than-satisfactory global demand for consumer electronics, including smartphones, tablets, notebooks, LCDs, TVs, servers etc. NVIDIA registered the largest decline among the five: 20.1%. This is also the first time in three years that Nvidia's seen YoY revenue declines for three consecutive quarters.
